Will Japan’s Fallen New Media Playboy Make a Comeback?

“Horiemon is out!” The news quickly spread across Japan on 27 March, when Takafumi Horie, a Japanese entrepreneur and a former president of the Internet portal Livedoor, came out from prison on parole after spending 19 months there for a security fraud. Horiemon is the 40-year-old’s nickname, a spin on Doraemon, a cat-like computer in a popular cartoon. Horie’s plump body reminded people of the shape of Doraemon. Having tweeted “I’m out” in the morning to break the news for his 950,000 followers, Horie faced more than 150 news organisations at a press conference in Tokyo in the evening.

Clad in a blue-checked shirt and a dark jacket, Horie looked trim, having shed nearly 30 kilograms during his incarceration. When the press conference was streamed live via the video sharing site Nico Nico Douga, 120,000 people tuned in. As if each of Horie’s words could mean something, the transcription of the conference was quickly published online. Three days after the streaming, more than 260,000 viewers saw how Horie spoke.

So, WHO is he?

“He’s a genius and a revolutionary,” says media strategist Tetsuji Nitta. “He has an extraordinary ability to tell what the future holds.”

For example, Horie had been using a social service network such as Japan’s largest SNS Mixi before such a service became a boom, Nitta said. Years ago, Horie used to say “broadcasting and telecommunications will be converged.”

This was before the birth of the American platform Hulu, BBC’s iplayer and any other streaming or video on demand services. Horie’s view at that time sounded unrealistic or a threat to the existing media. Now streaming video is a norm. Horie was Japan’s maverick, defining the future based on his belief in technology. And the young people pinned their hopes to him when Horie challenged the establishment.

Getting rich

Born in Fukuoka, one of Japan’s southernmost prefectures, Horie set up a web production company, On the Edge, in 1996 with his university friends. He went to the nation’s most prestigious academic centre, Tokyo University, but dropped out. In 2002, he purchased an Internet portal firm, Livedoor. Through mergers and acquisitions, Horie boosted the company to a market capitalisation of 730 billion yen at its peak.

Horie was different from any other typical Japanese top management figure. He was young, never wore suits, massively rich and didn’t hide the fact that he was rich. In his blog he chronicled his daily life eating at luxurious restaurants and meeting celebrities. His books on how to be rich and successful sold like hotcakes.

He also made a subscription-based mail magazines a new viable business. He kept writing for his micro-media even when he was in prison. Horie gained notoriety in 2004 when he offered to buy a baseball team, Osaka Kintetsu Buffaloes. A business proposal to a major baseball team from an unknown rookie was unprecedented. While this did not work out, he furthermore stunned the public in 2005. Horie announced that Livedoor had become the largest shareholder of a radio station, Nippon Broadcasting Systems. According to the reports, Horie’s aim was to grab the radio station’s subsidiary Fuji Television, a major network.

It was a rare hostile bid in a consensus-driven society. In the end, his plan to claw back Fuji did not go far enough (Livedoor and Fuji agreed on a compromise which was for Fuji TV to purchase Livedoor’s shares in NBS), young people’s adoration of Horie as a role model continued to grow. Horie’s popularity even caught then-prime minister Junichiro Koizumi’s eyes in 2005. Horie was asked by Koizumi’s Liberal Democratic Party to run for the upcoming general election as its candidate. He eventually ran as an independent and lost, garnering 84,433 votes while the winner, a career politician Shizuka Kamei, got 110,979.

Challenging the mainstream

By 2005, Horie, with Livedoor news under his belt, began to voice a vision for mainstream media. His brut view on the mainstream media was shared and welcomed by those who viewed the media as part of the establishment.

At times, however, Horie ruffled feathers of the liberal-minded people, who are normally his fans. A typical example was when Shoko Egawa, a seasoned journalist, interviewed Horie and reported their conversation in her blog on February 8, 2005. Horie indicated that he could start a newspaper that would print articles chosen by readers’ ranking rather than by the paper’s editorial staff.

“The paper will print what readers want to read, chosen purely by the market principle,” he said. Egawa countered, saying that the ranking system won’t pick up minority (but important) opinions. Horie said, “What’s wrong with that? There isn’t much meaning to carry stories which not many readers want to read. They are rubbish.”

Horie added, “it is arrogant for newspaper people to set aside a big space for topics which nobody wants to read.”

Yoshimi Tonooka, who runs a web marketing company Wise Project, says he “felt uncomfortable” reading this in Egawa’s blog. Still, Tonooka, who has been following Horie’s activities mainly as a critic, admits that Horie’s view that news topics will be ranked according to readers’ choices, are “now in reality by Googole’s search algorithm, such as Google News.”

Sudden fall

Horie’s business came to a halt in January 2006 when he was arrested by Tokyo public prosecutors on charges of fabricating financial reports and spreading false information to investors. After a series of trials, he was found guilty of falsifying Livedoor’s accounts and misleading investors. He was sentenced to 2 years and 6 months. In 2011, his appeal was rejected by the Supreme Court and Horie was sent to prison.
Livedoor was delisted and its portal site business was sold to a South Korean firm, NHN Corp.

Some say his sentence was too harsh, that Horie was singled out because of political retaliation for his challenging the establishment. Whatever the truth, focus is now on what he will do next. At the press conference in March, Horie mentioned the creation of a new form of news media on the Internet. He has not elaborated – much.

When an IT journalist and author Toshinao Sasaki met Horie in prison last year, he talked about his media plan in more detail. According to Sasaki’s mail magazine distributed on 9 July 2012, Horie’s new media project will be an assortment of “critiques and opinions based on facts.” There will be “edgy views “which will be good enough not only for readers in Japan but also for overseas readers.

He also referred to his interest in investigative reporting. Horie seemed to have been confident that it is possible to monetise such a project, even while finding a viable model for an Internet newsgathering operation is a conundrum for all media operators worldwide. Though still quite vague, does Horie’s vision mean anything now? Wise Project’s Tonooka and others in Japan think so.

“There is a growing objection to the journalism by the mainstream media which works as a judge of the news value and gives out the news in a top-down way. Horie’s vision to build a news system on the ’Net is quite interesting,” says Tonooka.

Nitta says if Horie, having experienced “unjust accusation,” sets up an operation focused on investigative reporting, it may be a good stimulation to the mainstream media which compete with the delivery speed of the news.

Jo Ishiyama, a media consultant, believes this is a good moment for Horie’s media business to succeed. “Things changed since he was arrested. At present we are in a society where other people’s evaluation is a key.”

In a social media era, he says, “how many supporters and sympathizers you can gather around you is an important factor to do business. What you do is evaluated by others.” He also suggests that Japan’s movers and shakers in the online business have been following Horie’s footsteps. “Horie’s influence in Japan’ information and technology world is still huge.”

So, whatever Horie chooses to do next, Ishiyama believes that the support from the new generation of ’net entrepreneurs will help him. Ibaraki University’s Prof. Junichiro Koga cites that having spent time in prison is not necessarily a negative factor for a business person to succeed.

“If Horie can carve out a new form of journalism, it is no doubt that the mainstream media will change.”

Ginko Kobayashi

Ginko Kobayashi is a freelance Japanese journalist and author. She lives in London and writes about media, technology, journalism and social affairs while going back and forth between Japan and Britain. Her books include “History of the British Media” and “WikiLeaks That Japanese People Don’t Know.” She blogs about British media and publishes a column on Yahoo! Japan as well as on BLOGOS.